BC'$ Carbon Tax

Sometimes we need to view a problem with our own eyes to appreciate its gravity. For British Columbia’s Premier Gordon Campbell, a trip to smog-choked Beijing helped him to understand the impact our actions have on the environment.

Campbell travelled to Beijing in November 2006 to participate in the lead-up to the Olympic Games. But what left the biggest impression on the Premier wasn’t the city’s new Olympic stadium but its poor air quality. He was shocked by the thick smog blanketing Beijing–the result of pollution from factories and millions of cars on the road.

Campbell returned to BC determined to get tough on pollution. A mere 10 weeks after his trip to China, Campbell announced an ambitious plan to slash BC’s greenhouse gas emissions 33 percent by 2020 and 80 percent by 2050.

This bold move puts BC at the forefront of action on climate change in Canada. But what really sets the province apart: its commitment to cut emissions is backed by real tools to help get the job done.

Encouraging Less Consumption

One of the most powerful tools in the province’s climate action arsenal is its new carbon tax–the first of its kind in North America.

The purpose of the carbon tax is to encourage everyone to make more environmentally friendly choices and to cut down on the amount of fossil fuels we use. It is based on a simple rule of economics–if people pay to pollute, they will choose to pollute less.

A carbon tax means we can no longer treat the atmosphere as a free dumping ground. There will be a cost attached to generating greenhouse gases.

“Seeing that cost, and making it real, will give us a new incentive to change the habits that created global warming in the first place,” said BC’s Finance Minister Carole Taylor in her budget speech. “Higher costs for high-carbon choices will make cleaner options more attractive to consumers, businesses, and industries alike.”

The carbon tax will apply to almost all fossil fuels, including gasoline, diesel, natural gas, coal, propane, and home-heating fuel.

Paying for Pollution

The carbon tax will be eased in at a rate of $10 per metric ton and will rise by $5 a year for the next four years, reaching $30 per metric ton by 2012. At the gas pumps, this will work out to a 2.41 cents per litre increase for gasoline in 2008, and will rise to a 7.24 cents per litre increase by 2012.

It’s important to note that the carbon tax is revenue-neutral. That means all of the money raised through the carbon tax will be returned to businesses and individuals in the form of income and business tax cuts.

In the end, we decide how much the carbon tax will affect us. We can choose to pay the tax or avoid it by making more environmentally friendly choices. For example, a family of four that heats their home with natural gas and drives a minivan will pay about $45 in 2008 and $118 in 2009. But that’s only if they choose not to change their habits.

If that same family of four decides to reduce their carbon footprint, they can save enough on their household expenses to come out ahead financially. If they drive just 10 kilometres less a week, they will save enough in fuel costs alone to offset the carbon tax in 2008. If they make more green choices, such as weather-stripping their home or leaving the car at home more often, they will come out ahead.

A carbon tax is one of the most powerful incentives governments have to encourage companies and households to pollute less by making polluting more expensive and being green more affordable.

Creating Innovative Solutions

It’s also nice to know that those of us in BC aren’t doing it alone. Several European countries have had carbon taxes in place for more than a decade, and the evidence shows that they work. Sweden, for example, has had a carbon tax since 1991. As a result, the country’s greenhouse gas emissions have decreased and the use of new technologies, such as heating alternatives, has replaced polluting energy sources.

Global warming is a big problem, and big problems require big solutions. One of the reasons our emissions have risen in BC and across Canada is because we’ve relied on voluntary measures to solve the problem. But experience has shown that voluntary measures don’t work. If we’re serious about tackling global warming and cutting our emissions, we need policy changes and mandatory measures at the provincial and federal levels of government.

A carbon tax is a step in the right direction toward a cleaner, greener future.